Storm Threatens US Gulf Refineries and 15% of Offshore Oil Production

'Tropical Depression Nine' is expected to turn into the first hurricane in the Atlantic Ocean for 2026 within two days, as it crosses north of the Yucatan Peninsula on Thursday and approaches the northern coast of the Gulf of Mexico on Friday, according to a report by the Baird Maritime platform. The storm's path places offshore areas and energy facilities in direct danger.

Offshore areas located in the storm's path produce about 15% of US crude and 5% of natural gas, meaning that production halts or platform evacuations could impact energy supply levels. This comes at a time when oil and gas markets are monitoring any disruption in US supplies.

The storm's landfall area could touch six refineries operated by Shell, Valero Energy, Marathon, PBF Energy, and Chevron. The Gulf of Mexico accounts for about 50% of US refining capacity, making any disruption at these refineries impactful on fuel and refined product markets.

Shell, Chevron, and BP have already begun evacuating non-essential workers from their offshore platforms as a precautionary measure ahead of the storm's arrival. Evacuations typically lead to temporary production cuts, as companies shut down some wells before the storm and restart them after it passes. Markets are expected to track any indication of production or refining impact in the coming days, as any disruption in Gulf refineries reflects on gasoline and diesel prices inside and outside the United States.

What do these terms mean?

Tropical Depression: An area of low atmospheric pressure over warm waters that may develop into a storm and then a hurricane as wind speeds increase.

Refineries: Industrial facilities that transform crude oil into products such as gasoline, diesel, and jet fuel.

Offshore Platforms: Fixed or floating structures in the sea that extract oil and gas from wells beneath the seabed.